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Realestate Purchase and Sales Agreements

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Realestate Purchase and Sales Agreements Powered By Docstoc
					            FAA Southwest Region Airports Division
                 2005 Partnering Conference
                       March 9, 2005



            Changes to 49 CFR Part 24
           Uniform Relocation Assistance and Real Property
        Acquisition for Federal and Federally-Assisted Programs




Rick Etter
Airport Acquisition Specialist
FAA, Office of Airport Planning and Programming
(202) 267-8773, rick.etter@faa.gov
                Objectives
 Identify most significant changes.
 Why these changes were made.
 How these changes affect airport
  projects.




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             Additional Information

FAA    Airports @ www.faa.gov/arp/environmental/land
      Updated Order and Advisory Circular, Q&A’s
FHWA     @ www.fhwa.dot.gov/realestate/ua/index.htm
      Q&A’s, Training Information
International   Right-of-Way Association @
www.irwaonline.org

      Training Seminars, Conferences


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         Uniform Relocation Assistance
         and Real Property Acquisition
               Policies Act (URA)

   URA Purpose (42 USC 4601 et seq)
          property owners fairly and
     Treat
    consistently.
   Treat persons displaced from their homes
    and businesses fairly, equitably,
    consistently.
   Minimize litigation.
   Act efficiently and in a cost-effective
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    manner.
            49 CFR Part 24
 Subpart A – General, § 24.2
  Definitions.
 Subpart B - Real Property Appraisal &
  Acquisition
 Subpart C -- General Relocation.
 Subpart D – Moving Cost.
 Subpart E – Replacement Housing.
 Subpart F -- Mobile Homes.

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           Effective Date of Changes

   Final rule published -- January 4, 2005.

   Rule effective -- February 3, 2005.

   FAA guidance updated.
       Updated FAA Order 5100.37B – March 05
       Updated FAA AC 150/5100-17 – June 05
       Available at www.faa.gov/arp/environmental/land


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49 CFR Part 24
  Subpart A

    Definitions
      Subpart A Changes
      § 24.2(a) Definitions

       (11) Dwelling site.
       (14) Household income.
       (17) Mobile home.
       (33) Waiver Valuation.




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      Subpart A Changes
      § 24.2(a) Definitions

         (6) Comparable replacement
          dwelling.
         (8) Decent, safe, and sanitary.
         (15) Initiation of negotiation
          (ION).
         (23) Salvage value.
         (29) Unlawful occupant.
         (30) Utility costs.
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  49 CFR Part 24
    Subpart B
Appraisal, Appraisal
Review, and Waiver
    Valuations
         Key Changes

    Appraisal waiver.
    Appraisal and appraisal review
     requirements.
    Qualifications.
    Responsibilities.




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             Is an Appraisal
             Required?
§ 24.102(c)(2) Appraisal not required if:
 Owner is donating property.
 Agency determines the appraisal
  problem is:
          Uncomplicated.
          Low   value.



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              Appraisal Waiver
              Changes.
        Low value is defined as up to $10,000:
          Increased from   $2,500.
        Also option now available for up to
         $25,000:
            FAA must approve.
            Owner must be offered option for appraisal.
        Sponsor Must Prepare a waiver
         valuation.

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                      Appraisal or Waiver
                          Valuation?
                       Is the value expected to
Is the acquisition YES be less than $10,000?      YES
                                                        Waiver Valuation
 uncomplicated?        (or less than $25,000 if
                           FAA approves this
                                option.)
   NO                        NO

               Appraisal




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            Waiver Valuation Requirements

   Prepared by knowledgeable person.
   Not an appraisal.
   Review not required.
   Owner accompaniment not required.
   Sponsor responsible for:
          Basis for preparing.
          Establishing just compensation amount.



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              Appraisal Assignment

            Sponsor is to participate in:
              Definingthe appraisal problem.
              Developing the scope of work.


            Appraisal must identify personal
             property.
              Personal Property – § 24.103(a)(2)(i).
              Real Property – Appendix A § 24.103(a)(i).


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                  Appraisal Scope of Work
    Should address:
          Purpose/function   of appraisal (Appraise FMV)
          Definition of estate to be appraised.
          Appraisal Requirements under 49 CFR 24
               Owner accompaniment, 5yr sales history, etc
          Assumptions      and limiting conditions.
          May include:
             Data search parameters.

             Analysis approaches.

          Details   commensurate with complexity/value.
          May    be updated as needed.

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          Appraisal Review
   Review appraiser responsibilities:
     Assure all appraisal requirements are met.
     Meets definition of appraisal in § 24.2(a)(3).

   Review appraiser actions:
     Review     report must state review findings that:
           Appraisal is recommended.
           Appraisal is accepted (meets all
            requirements).
           Not accepted. (Including reason for
            rejection).
       If necessary, may prepare an independent
        valuation that meets requirements (per §
A - 18 24.103).
49 CFR Part 24
  Subpart B
    Offers,
Negotiations, and
  Settlements
           Key Changes

   Voluntary Transactions Offers.
   Administrative settlements.
   Conflict of interest.




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             Voluntary Transactions
                  49 CFR 24.101(b)
         Tenant Relocation & Contacting Owners

  Tenant relocation eligibility trigger:
   Initiation of Negotiation is
   acceptance of sales agreement.
  Notices and offers to owner must be
   in writing.




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               Conflict of Interest
                   49 CFR 24.102(n)

   Appraisers, review appraisers, or
    waiver valuation preparers:
      Shall not have any interest in property.
      Shall not be subject to influence or
       coercion regarding valuation.
      May be authorized to act as a negotiator
       where valuation role is for acquisitions
       <$10,000.

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             New Conflict of Interest Restriction
                  @ 49 CFR 24.102(n)(2)
        Negotiator (i.e. Person making the
         offer) cannot supervise or formally
         evaluate:
          Appraisers.
          Review appraisers.
          Persons performing waiver valuations.

        FAA may waive for hardship.

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   49 CFR Part 24
     Subpart C
General Relocation
  Requirements
         Key Changes

 Relocation planning for
  displaced businesses.
 Advisory services.
 No waiver of benefits allowed.




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                  Relocation Planning
               Project Development Stage
                  49 CFR 24.204(a)(4)
Relocation Planning must:
   Indicate Availability of replacement business sites
   Discuss impacts of any shortage
   Consider complexity and length of moving process in
    developing lead time estimate.
   Discuss displacement impact on small financially
    constrained businesses (e.g. Mom & Pop,
    Neighborhood dependent business)
   Secondary Sources Allowed to Survey Needs.


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               Relocation Planning
        Acquisition Stage (prior to offer)
              49 CFR 24.204(c)(2)(I)
 Personal interview with displaced
  business required to determine:
     Replacement     Site requirements.
     Need for Outside specialists.
     Personalty/realty issues.
     Time required to vacate.
     Site availability.
     Advance payment needs.


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             New Advisory Services –
                  Residential
   Decent, safe, and sanitary standard relies
    on local codes.
   If displaced from or moving to government-
    assisted housing, advise that the size/room
    limits of that program apply.
   For persons eligible, must advise that
    government housing assistance exceeds 42-
    month URA rental assistance.
   Transportation offered to all displaced
    persons.
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         No Waiver of Relocation
         Assistance or Benefits
   § 24.207(f) No soliciting waivers of
    relocation assistance or benefits.




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         Expenditure of Payments
   § 24.207(g) Expenditure of relocation
    funds by displacee does not constitute
    Federal financial assistance.




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  49 CFR Part 24
    Subpart D
Moving Costs and
Related Expenses
         Major Changes
   Subpart reorganized
   Searching expenses increased
   “New” eligible nonresidential
    expenses.
   New personal property only moves.
   Calculating actual direct loss.
   Low value/high bulk items.



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            Reorganized Subpart
Old Rule                           New Rule
   § 24.301                        § 24.301 Expanded
   § 24.302                        § 24.302 Reworded
   § 24.303                        § 24.303 NEW*
   § 24.304
                                    § 24.304
   § 24.305
                                     Unchanged
   § 24.306
                                    § 24.305 New # only
   § 24.307
                                    § 24.306 New # only
         *No longer subject to a$10,000 re-establishment cap.

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             Non-Residential Search Expense
                  49 CFR 24.301(g)(17)

   Limit Raised to $2500
   Reimburse Owner or Professionals’ time
    spent,
          Obtaining permits and attending hearings.
          Negotiating the purchase or lease of
           replacement site.




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              “Related Eligible Expense” 24.303 –
               (Formerly Under Reestablishment Expense)

   Actual, reasonable, and necessary cost for:
     Utility connection from right of way to
      replacement building (Not related to personal
         property).
     Professional   services prior to
         purchase/lease to determine suitability of
         replacement site:
             Soil testing, feasibility, and marketing studies
              to determine site suitability.
     Impact      fees and one-time assessments for
A - 35   utility usage.
             Reestablishment Expense 24.304 –
                Still subject to $10,000 Cap

   § 24.304 Actual, reasonable, and
    necessary costs for:
        Repairs or improvements required by Federal, state, or
         local law, code, or ordinance.
        Modifications to the replacement property to
         accommodate the business operation or make the
         replacement structures suitable for conducting business.
        Construction and installation costs for exterior signing to
         advertise the business.
        Redecoration or replacement of soiled or worn surfaces,
         such as paint, paneling, or carpeting.
        Licenses, fees, and permits when not paid as a moving
         expense.
        Advertisement of replacement location.
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             Moves of Personal
             Property Only
   New § 24.301(e)
    covers situations
    in which the main
    business or
    dwelling is not
    required to move
    but the owner’s
    or tenant’s “stuff”
    is.
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            Actual Direct Loss
            § 24.301(g)(14) Payment is the lesser of:
( i ) Market value in place “as is.”


                         LESS



                          or
( ii ) Estimated cost to move and reconnect “as is.”
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         Low Value/High Bulk
§ 24.301(g)(18). This is a
  new addition to the list
  of eligible moving
  expenses.                  Price for sale
  Stockpiled sand,            at old site.
  gravel, and similar
  items are examples
  listed in Appendix A.
                             Cost for new
Pay the                      at new site.
lesser of ...
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     49 CFR Part 24
       Subpart E

Replacement Housing
     Payments
            Key Changes
        Comparability determination.
        Base Monthly Rent for Low
         Income Households.
        Replacement Housing Payments.
          Cost of Comparable - No List Price
           Adjustments
          180-day Owner that Rents
          Downpayments
          Subsequent Occupants



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           Comparable
           Replacement Dwelling
        Slightly revised definition in §
         24.2(a)(6):
          Removed  “style of living” phrase.
          Reason – functionally equivalent, but not a
           “twin”.




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                Base Monthly Rent for Low
                  Income Households?
                    49 CFR 24.402(b)(2)(ii)
        Base Monthly Rent is the lesser of Actual
         Rent or 30% of monthly household income
         for “Low Income” Households.
        Use 30% of monthly household income
         ONLY when tenants and occupants are
         considered “low income” by the U.S.
         Department of Housing and Urban
         Development’s Annual Survey of Income
         Limits for the Public Housing and Section 8
         Programs.

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         Finding Low Income Limits
         http://www.fhwa.dot.gov/realestate/index.htm




                                     Access is
                                     available on
                                     the FHWA
                                     Realty
                                     homepage.
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         Cost of Comparable Dwelling
                 § 24.403(a)(1)
Adjustment of asking price no longer
 necessary or allowed.

Former FAA requirement no longer
 applicable.




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           Payment Options
   § 24.401(f) 180-day owner who rents:

          Eligible for      Market Rental         Prior Limit
         Purchase RHP       Computation

           $19,500             $12,500              $5,250




                        NEW PAYMENT LIMIT
               NTE Eligible Purchase Price Differential
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          Payment Options
             § 24.402(c) 90-day Tenant
                   Downpayment:
         Eligible for   Downpayment
                                      Prior Limit
           Rental        0n $50,000
                                        @ 20%
         Assistance     Mobile Home
                                       Required
                                       $10,000
          $12,000         $12,000




                        NEW LIMIT
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         Housing of Last Resort,
         Subsequent Occupants
Less than 90 day occupants
 (Subsequent Occupants) may now
 receive “rent to rent” payment.

FHWA is monitoring this and will issue
 Q&A on the regulatory change and on
 the use of “Rent Loss Agreements” to
 preclude Subsequent Occupants.

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        49 CFR Part 24
          Subpart F

Mobile Homes
         Key Topics

    New definition.
    Reorganization.
    Early payment eligibility
     determinations.
    Payment options.




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    Reorganization
Old Rule       New Rule
                Moved to Subpart
   § 24.501     D, § 24.301(g)(8) to
                 (10)
   § 24.502
                  § 24.501
   § 24.503

   § 24.504      § 24.502

   § 24.505      § 24.503

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Reorganization (cont.)
        Revised § 24.502 covers:
          (a) Eligibility for 180-day owner
           occupants.
          (b) Replacement housing payments.
          (c) Rental assistance.
          (d) Mobile home as personal property.

        Revised § 24.503 covers:
          Eligibility   for 90-day occupants and
          tenants.
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  New Definition
    § 24.2(a)(17) Mobile home.
     The term mobile home includes
     manufactured homes and recreational
     vehicles used as residences.
    Definition was added to clarify what is
     recognized by HUD for its programs.



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            Mobile Homes



Pre-1976 Mobile              Manufactured
Home                         Housing




              Recreational Vehicle
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    Determinations
        Basic to mobile home situations:
          Is the mobile home being acquired as real
           or personal property?
          If personal property, is the mobile home:
             Able to be moved?
             Able to be DSS?

             Are comparable replacement sites available
              prior to displacement?


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     Payment Option
        § 24.502(c) permits purchase of
         conventional dwelling with combined
         payment eligibility.
         i.e. Housing supplement for mobile home
           plus rental supplement for site applied at
           purchase of conventional replacement
           dwelling.
        Limited to $22,500 unless last resort
         applies.

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         Changes to 49 CFR Part
                  24
          That’s ALL of Them!
                     Thank you.
               Any questions?
Rick Etter
Airport Acquisition Specialist
FAA, Office of Airport Planning and Programming
(202) 267-8773, rick.etter@faa.gov

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            MARK YOUR CALENDARS




              IRWA 2005 Uniform Act Seminar
                   November 7- 9, 2005
                     Hilton Anaheim
                      Anaheim CA
    www.irwaonline.org/news_events/meet_events/2005-Uniform-Act-
                          Symposium.cfm


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